§5215. Jobs and investment tax credit

1.Credit allowed.
A taxpayer, other than a public utility as defined by Title 35-A, section 102, is
allowed a credit to be computed as provided in this section against the tax imposed
by this Part, subject to the limitations contained in subsection 3. The amount of
the credit equals the qualified federal credit, as defined in subsection 2, for taxable
years beginning on or after January 1, 1979, except that a credit may be taken with
respect to used property, and may not be allowed with respect to an excluded investment.

[
1997, c. 504, §14 (AMD)
.]

2.Definitions.
As used in this section, unless the context otherwise indicates, the following terms
have the following meanings.

A. "Qualified federal credit" means, with respect to any taxable year, that portion
of the credit allowed by the Internal Revenue Code of 1954, Section 38(b)(1), as of
December 31, 1985, that is directly and solely attributable to qualified investment
with a location in this State. [1997, c. 504, §15 (AMD).]

A-1. "Excluded investment" means an investment related to a retail facility, unless the
taxpayer can demonstrate to the satisfaction of the State Tax Assessor that the commercial
result of the project or projects to which the credit relates has not or will not
result in a substantial detriment to existing businesses in the State. [1993, c. 672, §1 (NEW); 1993, c. 672, §2 (AFF).]

A-2. "Retail facility" does not include a facility primarily engaged in warehousing,
order taking, manufacturing, storage or distribution, even when a portion of the facility
is used to make retail sales of tangible personal property directly from the facility. [1993, c. 672, §1 (NEW); 1993, c. 672, §2 (AFF).]

B. The term "new jobs credit base" means the excess of Bureau of Unemployment Compensation
wages for the taxable year of the qualified investment or either of the next 2 calendar
years over the Bureau of Unemployment Compensation wages for the highest of the 3
calendar years preceding the year of the qualified investment. In computing its new
jobs credit base, a successor-taxpayer shall add to its own Bureau of Unemployment
Compensation wages the Bureau of Unemployment Compensation wages of its predecessor. [1995, c. 560, Pt. G, §19 (AMD).]

C. The term "Bureau of Unemployment Compensation wages" means the total amount of wages
paid by an employer subject to tax under Title 26, section 1221, less any excesses
attributable to statutory increases. [1995, c. 560, Pt. G, §20 (AMD).]

D. "Successor-taxpayer" means a taxpayer that has acquired, within 4 years of its taxable
year-end, the organization, trade or business, or 50% or more of the assets of the
organization, trade or business, of another taxpayer that, at the time of the acquisition,
was an employing unit. [1993, c. 672, §1 (AMD); 1993, c. 672, §2 (AFF).]

E. "Used property" means property that is originally placed in service by the taxpayer
outside of this State. The cost of property used by the taxpayer outside of this
State and then placed into service in this State on or after January 1, 1997 is the
original cost of the property to the taxpayer, minus the straight-line depreciation
allowable for the tax years or portions of the tax years during which the taxpayer
used the property outside of this State. The cost of property used by the taxpayer
outside of this State and then placed into service in this State before to January
1, 1997 is the original cost of the property. [1997, c. 504, §16 (NEW).]

[
1997, c. 504, §§15,16 (AMD)
.]

3.Limitations.
The tax credit for any taxable year is applicable only to those taxpayers:

A. With property considered to be qualified investment of at least $5,000,000 for that
taxable year with a situs in the State and placed in service by the taxpayer after
January 1, 1979; and [2003, c. 391, §7 (AMD).]

B. With payroll records and reports substantiating that at least 100 new jobs attributable
to the operation of property considered to be qualified investment were created in
the 24-month period following the date the property was placed in service. To assess
the continuing nature of the jobs, the taxpayer must demonstrate that the new jobs
credit base is at least $700,000 for the taxable year of the qualified federal credit
or for either of the next 2 calendar years. The $700,000 must be adjusted proportionally
for any change in Title 26, section 1043, subsection 2 wages from $7,000. With respect
to new jobs created after August 1, 1998, but before October 1, 2001, the employer
must also demonstrate that the qualifying jobs are covered by a retirement program
subject to the Employee Retirement Income Security Act of 1974, 29 United States Code,
Sections 101 to 1461, as amended; that group health insurance is provided for employees
in those positions; and that the wages for those positions, calculated on a calendar
year basis, are greater than the most recent average annual wage in the labor market
area in which the employee is employed. [2003, c. 391, §8 (AMD).]

C. [1999, c. 414, §56 (AFF); 1999, c. 414, §46 (RP).]

[
2003, c. 391, §§7, 8 (AMD)
.]

4.Carry-over.
The amount of credit that may be used by a taxpayer for any taxable year may not
exceed either $500,000 or the amount of tax otherwise due, whichever is less. Any
unused credit may be carried over to the following year or years for a period not
to exceed 7 years, including the year the credit was first taken, and may be deducted
from the taxpayer's tax for that year or those years, subject to the same limitations
provided in this subsection.

[
1993, c. 672, §1 (AMD);
1993, c. 672, §2 (AFF)
.]

5.Carry-back.
There may be no carry-back to prior years of the amount of credit allowable under
this section.

[
1993, c. 672, §1 (AMD);
1993, c. 672, §2 (AFF)
.]

6.Recapture.
If, during any taxable year, any qualified investment property is disposed of, or
otherwise ceases to be property covered by subsection 3, paragraph A with respect to the taxpayer, before the end of the useful life that
was taken into account in computing the credit under subsection 1, then the tax under
this Part for that taxable year must be increased by an amount equal to the aggregate
decrease in the credit allowed under subsection 1 for all prior taxable years that
would have resulted solely from substituting for the useful life, in determining qualified
investment under the Internal Revenue Code of 1954 as of December 31, 1985, the period beginning with the time the property was placed in service by the taxpayer
and ending with the time the property ceased to be property covered by subsection 3.

[
2007, c. 627, §89 (AMD)
.]

6-A.Affiliated groups; tax years prior to January 1, 1995.
This subsection applies retroactively to all tax years beginning before the effective
date of this subsection as well as prospectively to all tax years beginning on or
after the effective date of this subsection but prior to January 1, 1995 and for which
the taxpayer's right to file an original or amended return had not or has not expired
at the time of the taxpayer's filing of the return. In the case of corporations that
are members of an affiliated group engaged in a unitary business, the credit provided
for in this section applies as follows.

A. The credit provided for in this section, in an amount equal to the aggregate qualified
federal credit for all taxable corporations that are members of an affiliated group
engaged in a unitary business, must be allowed against the total tax liability of
all the taxable corporations that are members of the affiliated group engaged in a
unitary business if the taxable corporations that are members of the affiliated group
have, in the aggregate:

(1) Property considered to be qualified investment of at least $5,000,000 for that
taxable year with a situs in the State and placed in service by the taxable corporations
after January 1, 1979;

(2) Payroll records and reports substantiating that at least 200 new jobs attributable
to the operation of property considered to be qualified investment were created in
the 12-month period following the date the property was placed in service; and

(3) A new jobs credit base of at least $1,400,000 for the taxable year of the qualified
federal credit or the next calendar year. The $1,400,000 must be adjusted proportionally
for any change in Title 26, section 1043, subsection 2 wages from $7,000. [1993, c. 672, §1 (NEW); 1993, c. 672, §2 (AFF).]

B. The amount of the credit that may be used in any taxable year may not exceed the
lesser of $300,000 or the total amount of tax liability otherwise due of all taxable
corporations that are members of an affiliated group engaged in a unitary business.
Any unused credit may be carried over to the following year or years for a period
not to exceed 7 years, including the year the credit was first taken, and may be deducted
from the tax imposed by this Part for that year or those years, subject to the same
limitations provided in this subsection. [1993, c. 672, §1 (NEW); 1993, c. 672, §2 (AFF).]

The credit must be apportioned among the taxable corporations in the affiliated group
in the same proportion that the tax liability of each taxable corporation in the affiliated
group bears to the total tax liability of all the taxable corporations in the affiliated
group.

[
1993, c. 672, §1 (NEW);
1993, c. 672, §2 (AFF)
.]

6-B.Affiliated groups; tax years beginning on or after January 1, 1995.
This subsection applies to tax years beginning on or after January 1, 1995. In
the case of corporations that are members of an affiliated group engaged in a unitary
business, the credit provided for in this section applies as follows.

A. The credit provided for in this section, in an amount equal to the aggregate qualified
federal credit for all taxable corporations that are members of an affiliated group
engaged in a unitary business, must be allowed against the total tax liability of
all the taxable corporations that are members of the affiliated group engaged in a
unitary business if the taxable corporations that are members of the affiliated group
have, in the aggregate:

(1) Property considered to be qualified investment of at least $5,000,000 for that
taxable year with a situs in the State and placed in service by the taxable corporations
after January 1, 1979;

(2) Payroll records and reports substantiating that at least 100 new jobs attributable
to the operation of property considered to be qualified investment were created in
the 24-month period following the date the property was placed in service; and

(3) A new jobs credit base of at least $700,000 for the taxable year of the qualified
federal credit or either of the next 2 calendar years. The $700,000 must be adjusted
proportionally for any change in Title 26, section 1043, subsection 2 wages from $7,000. [1993, c. 672, §1 (NEW); 1993, c. 672, §2 (AFF).]

B. The amount of the credit that may be used in any taxable year may not exceed the
lesser of $500,000 or the total amount of tax liability otherwise due of all taxable
corporations that are members of an affiliated group engaged in a unitary business.
Any unused credit may be carried over to the following year or years for a period
not to exceed 7 years, including the year the credit was first taken, and may be deducted
from the tax imposed by this Part for that year or those years, subject to the same
limitations provided in this subsection. [1993, c. 672, §1 (NEW); 1993, c. 672, §2 (AFF).]

The credit must be apportioned among the taxable corporations in the affiliated group
in the same proportion that the tax liability of each taxable corporation in the affiliated
group bears to the total tax liability of all the taxable corporations in the affiliated
group.

[
1993, c. 672, §1 (NEW);
1993, c. 672, §2 (AFF)
.]

6-C.Application.
Except for the credit allowed with respect to the carry-over of unused credit amounts
pursuant to subsection 4, the tax credit allowed under this section does not apply
to tax years beginning on or after January 1, 2016.

[
2015, c. 267, Pt. DD, §20 (NEW)
.]

7.Legislative findings.
The Legislature finds that encouragement of the growth of major industry in the State
is in the public interest and promotes the general welfare of the people of the State;
that the use of investment tax credits to encourage industry to make substantial capital
investments in the State is necessary to promote the purpose of the Legislature of
encouraging the growth of industry; and that the requirements of at least $5,000,000
in qualified investment in the State and an increase of at least 100 new jobs following
the investment are reasonable qualifying criteria for the application of an investment
tax credit and will best promote substantial capital investment in the State.